The State of Small Business at Midyear: Wary But Hopeful
A survey of 700 businesses this spring by San Francisco-based Union Bank(UNB) highlighted how difficult it is to make grand generalizations, since individual experiences vary so widely. About half of the owners surveyed said the business climate has worsened over the past two years, but the same percentage also believes it will improve over the coming two years. Over the past year, one-third of respondents saw sales go up, one-third maintained steady sales and one-third saw sales fall. So what's the headline?
That even three-way split was also seen in the most recent Wells Fargo/Gallup Small Business Index Survey, in which 36% of the owners surveyed said revenue had increased over the past year, 24% said it stayed the same and 39% saw revenue decrease.
Overall, optimism levels in this quarterly survey were at their highest point since the fall of 2008. About half the respondents expected revenue to increase in the next year, with only 15% predicting their company's financial situation would be "somewhat" or "very" poor.
But that sunny outlook hasn't carried over into hiring. According to the Union Bank and Wells Fargo/Gallup surveys, only about 20% of owners expect to do any hiring over the coming year. The NFIB survey found that less than 10% of respondents plan to hire more workers in the next three months.
So what can we conclude from all these stats?
The worst is (hopefully) over. Overall, the optimism of business owners is higher than it's been in years.
The small picture is better than the big picture. Business owners may have little faith in a speedy recovery for the U.S. economy, but they're becoming more confident about their own chances of success.
Hiring remains weak. Owners may feel better, but they're still wary of taking on the expense of new employees. Which means we can't depend on small businesses to make much dent in the unemployment rate, at least in the near future.
But perhaps the most important lesson to take away is that American small businesses defy easy categorizations. Some are thriving, others are on their last legs. No matter what a survey says, there will always be examples that don't fit the mold.
And isn't that a good thing?